Army Corps delays Point Thomson decision until November

Post date:

Mon, 08/13/2012 - 7:19am

The U.S. Army Corps of Engineers has delayed its record of decision and final approval of the environmental impact statement for the ExxonMobil-led Point Thomson gas cycling and condensate production project to at least Nov. 1.

Construction this winter on the project could be in jeopardy. Previously the Corps had a target date for the ROD in September.

“This is just an estimated date, as was the earlier target date,” Corps spokeswoman Pat Richardson in a statement Aug. 10. “The dates we estimate for a Record of Decision are just that – target estimates. With a permit application this large with an associated EIS and many issues to address, our target dates will move, as they have with this proposed project.”

Alaska U.S. Sen. Lisa Murkowski and Gov. Sean Parnell criticized the U.S. Army Corps of Engineers for delaying the record of decision.

Parnell is asking Interior Secretary Ken Salazar in intervene with the Corps to keep the project on schedule.

Point Thomson is a large gas and condensate discovery 60 miles east of Prudhoe Bay. ExxonMobil and other leaseowners, BP and ConocoPhillips, plan a gas cycling and condensate production project. ExxonMobil, BP and ConocoPhillips, the owners, are planning a project to recycle gas and produce 10,000 barrels per day of liquid condensates in the first phase of a development project.

The condensates would be moved to Prudhoe Bay by pipeline and mixed with crude oil in the Trans Alaska Pipeline System.

Beginning construction this winter is necessary for the project to be complete and in production by 2016, ExxonMobil told a state legislative panel in Anchorage a few weeks ago.

"This unexpected delay threatens to set production at Point Thomson back another year, costing the state of Alaska both jobs and millions of barrels of oil that is needed to boost throughput in the trans-Alaska oil pipeline," Murkowski said in her statement.

A 500-page environmental impact statement for Point Thomson was finalized in late July and Corps officials said then they would approve the record of decision, the final step in the EIS, in 30 days, Murkowski said in her statement. A Murkowski staff member in Washington said the senator will attempt to meet with the Corps to urge action on the ROD.

Murkowski is the ranking minority member on the Senate Energy and Natural Resources Committee.

ExxonMobil itself was cautious in its response.

“We decline to speculate on the date of issuance of the Record of Decision and the impact, if any, on the project schedule. We are working closely with the U.S. Army Corps of Engineers to provide information requested to support its work to enable issuance of the Record of Decision,” an ExxonMobil spokesman said in a statement.

However, in recent briefings to state legislators in Alaska, ExxonMobil expressed concern about delays in the ROD and final approvals of federal permits tied to the EIS if those are pushed too far into late autumn because the delays could affect the winter construction season, which is vital to keeping the project on track for a startup in 2016.

The company has told congressional staff in Washington, D.C., that it needs the ROD and permits in October, at the latest, to allow time to mobilize contractors and get an ice road under construction to Point Thomson, which is about 60 miles east of Prudhoe Bay on the North Slope.

Other work planned for this winter include an airstrip, gravel roads and installation of vertical support members for a 22-inch pipeline.

Parnell wrote a letter to Salazar Aug. 11 asking for help because of the Interior Secretary's initiative to improve the performance of federal permitting on energy projects in Alaska.

"As the lead federal agency, the Corps had recently committed to issue the ROD by Sept. 21. On August 1 senior state of Alaska officials were given assurances by senior Corps and Department of the Interior officials that the Corps' Alaska District would meet that deadline," Parnell said in the Aug. 11 letter to Salazar.

"State officials have been working hard over the past two years in processing approximately 100 state permits required for the Point Thomson project. The state remains ready to issue these permits as early as next month, enabling construction this winter. If the Corps does not issue its ROD on of near the original target date of September another winter construction season will be lost," Parnell wrote.

The Point Thomson gas and condensate discovery was made in the 1970s but its development was delayed due to lack of a natural gas pipeline. ExxonMobil more recently developed the plan to produce the gas, strip liquid condensates, reinject the gas and then ship the liquids to TAPS through the new 22-inch gas pipeline.